While Wenzel doesn’t believe that the U.S. economy is about to tip back into recession, he cautioned that macroeconomic data would remain lackluster over the next few months, with the U.S. Institute of Supply Management index potentially slipping back to 50 or below. In other words, the recovery will stall.

“We are clearly on a sub-trend growth rate over the next six months,” Wenzel said in an interview with MarketWatch in Paris.

The original sharp rebound in the economy was the result of massive fiscal and monetary stimuli, which he compared to an adrenaline shot into the body of a dying patient.

“Now we are in the transition phase. The patient is slowly getting better but is unstable,” he said. And the patient may not get out of the hospital without another powerful injection in the form of a further round of quantitative easing in the U.S.

First, they should stick to government bonds from core European countries and stay clear of peripheral European ones, such as those issued by Greece and Ireland.

Second, they should expect earnings forecasts for 2011 to come down. Wenzel predicted earnings growth of around 10% compared to 15% for the consensus. Companies that will likely do best are those that can communicate on their top-line outlook, he said.

Finally, at the right time, investors should try to “buy the dip”; such an opportunity may come, for instance, if the S&P 500
SPX, -0.23%
gets back to around 1,000. The index closed at 1,142.16 on Monday.

Investment themes

In equities, a few themes remain valid despite the recent slowdown and should help drive investment decisions, according to Gilles Guibout, who manages two large European funds at AXA Framlington, a specialist equity-fund manager within AXA Investment Managers.

One of them is investment spending by companies, which has picked up since the start of the year, as they replace equipment in order to boost productivity.

“Today the western consumer is weakened, governments are seriously weakened, so there are only companies left to spend. And they must, if they want not to lose market share,” Guibout said.

That makes the likes of SAP AG (SAP)
SAP, +0.04%
and Dassault Systemes (DSY) worth a look, particularly in light of historically low valuations. Companies must also continue to advertize so as not to lose market share, which is good for the likes of outdoor-advertising firm JCDecaux (DEC) and TF1, which is majority-owned by Bouygues SA (EN).

Another theme that remains valid despite the recent economic slowdown is demographic evolution. In the western world, people are living longer and need more specialized care as they age. Orpea (ORP) , France’s largest retirement-home operator, and Fresenius Medical Care (FME)
FMS, -0.34%
, a specialist in dialysis, are well-positioned to take advantage of these trends.

Meanwhile, in emerging countries rapid population growth means rising infrastructure needs and the emergence of a middle class craving access to high-end goods like expensive handbags and branded alcohol.

In the infrastructure sector, Guibout likes German gases and engineering company Linde AG (LIN) and France’s Vinci SA (DG). As for spirits, he mentioned Remy Cointreau SA (RCO) , the home of Remy Martin cognac, and luxury goods French giant LVMH.

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